Correlation Between Aptiv PLC and Apollomics

Can any of the company-specific risk be diversified away by investing in both Aptiv PLC and Apollomics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aptiv PLC and Apollomics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aptiv PLC and Apollomics Class A, you can compare the effects of market volatilities on Aptiv PLC and Apollomics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aptiv PLC with a short position of Apollomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptiv PLC and Apollomics.

Diversification Opportunities for Aptiv PLC and Apollomics

0.41

Correlation Coefficient

Aptiv PLC  Apollomics

Very weak diversification

The 3 months correlation between Aptiv and Apollomics is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aptiv PLC and Apollomics Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollomics Class A and Aptiv PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aptiv PLC are associated (or correlated) with Apollomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollomics Class A has no effect on the direction of Aptiv PLC i.e., Aptiv PLC and Apollomics go up and down completely randomly.

Pair Corralation between Aptiv PLC and Apollomics

Given the investment horizon of 90 days Aptiv PLC is expected to under-perform the Apollomics. But the stock apears to be less risky and, when comparing its historical volatility, Aptiv PLC is 5.2 times less risky than Apollomics. The stock trades about -0.11 of its potential returns per unit of risk. The Apollomics Class A is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,260  in Apollomics Class A on September 5, 2024 and sell it today you would lose (108.00) from holding Apollomics Class A or give up 8.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Aptiv PLC  vs.  Apollomics Class A

Aptiv PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptiv PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Apollomics Class A

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apollomics Class A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting essential indicators, Apollomics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aptiv PLC and Apollomics

The main advantage of trading using opposite Aptiv PLC and Apollomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptiv PLC position performs unexpectedly, Apollomics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Apollomics will offset losses from the drop in Apollomics' long position.

The idea behind Aptiv PLC and Apollomics Class A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.